The US India Business Council said India's 2010-11 Budget defined important steps aimed at fuelling growth and signaled that the global recession of 2008-2009 is already a remnant of the past for it.
"India's Budget propels growth, of its already robust economy-now topping 8 per cent GDP, and puts recession in the past," USIBC said in a statement from Washington.
The new budget lays a strong foundation for the country to attract needed investment, spur innovation, and drive inclusive growth for all of its citizens.
USIBC welcomed the Finance Minister Pranab Mukherjee's comments and is encouraged by the Budget's provisions. "The key to improving the lives of India's citizens is sustainable growth led by a vibrant and competitive private sector," USIBC President Ron Somers, said.
"This Budget's emphasis on infrastructure, education, corporate governance and fiscal responsibility sends a message that the government is ready to take India to double digit growth for the benefit of all its citizens."
USIBC welcomed the FM's acknowledgement of the importance of introducing competition into the retail sector by opening up retail trade.
"He has also outlined a clear agenda to address agricultural productivity. Moreover, the government's commitment to ensure that the banking system is able to grow to meet the needs of India's expanding economy is important to driving inclusive growth," Somers said.
USIBC is especially pleased with the announcement that additional banking licenses to private sector players, including Non Banking Financial Companies, is under consideration, Somers said.
USIBC also welcomed the finance ministry's recognition in the Economic Survey, released on Thursday of the importance of the insurance sector in driving economic growth.
USIBC urges the government to raise the FDI cap in insurance to 49 per cent, which is critical to attracting the long-term capital investment needed to help finance India's ambitious infrastructure build-out.
The Budget also took an important step to increase collaboration between the US and Indian entertainment sectors-Hollywood meets Bollywood-by updating the customs code to reflect technological changes in the film and television industry.
USIBC did express concerns over increases in excise taxes on a range of products. Moreover, while the fuel levy is meant to generate additional government revenue, USIBC remains concerned that the higher energy costs could trigger a rise in inflation.
Raising the Minimum Alternative Tax (MAT) from 15 per cent to 18 per cent could also act as a deterrent to infrastructure and energy investment, USIBC said.
USIBC is encouraged by a balanced budget that sets an ambitious road map to take India to the next level of growth.
